Up to 50,000 households could lose their homes. Guideline rents will become more expensive in April.
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Chamber of Labor (AK) and tenants' association want to protect hundreds of thousands of tenants in Austria from impending additional burdens. Despite the expiry of the Corona rent deferrals at the end of March, the residents should be protected from dismissals or evictions, according to an online press conference on Wednesday. In addition, the increase in benchmark rents that is due in April, like every two years, should be suspended – this time around three percent.
The previously deferred rents for April, May and June 2020 are due together with the April rent – this is difficult to afford for many people with half a million unemployed and almost as many short-time workers, said the head of the AK department for local politics and housing , Thomas Ritt. There could be 20 percent more rent arrears this year, and the number of evictions could even double in 2021, he warned.
Corona dismissal protection only postpones the problem
For the deferred rents from April to June 2020, there is a special Corona dismissal protection, the Ministry of Justice said to the APA: The lease cannot be terminated until the end of June 2022 simply because of this rent arrears, so there is currently no risk of evictions due to this rent arrears when the deferred rents cannot now be paid all at once.
In addition, there is currently a special Corona eviction protection for financial problems for all tenants: A Corona evacuation deferral can be applied for until June 2021 – eviction can be postponed for three to six months. This results from the 2nd Covid-19 Legal Accompanying Act in conjunction with Section 35 Tenancy Law (MRG).
It was good to suspend the termination options and to defer the rents for the second quarter of 2020 – “that only postponed the problem,” said the president of the Austrian tenants' association, Georg Niedermühlbichler. That is why they called for a “Safe Living Fund” eight months ago, endowed with at least 100 million euros, which should replace the rental losses. The government has announced many aid measures for the economy, but it should also support the tenants so that they do not lose their apartments.
On the part of the Viennese tenants' association, its chairman, Elke Hanel-Tor, pointed out that sooner or later 50,000 households could be confronted with eviction suits or evictions. Even before the corona crisis, 380,000 households were overloaded with their housing costs because they had to spend more than 40 percent of their income on housing. In Vienna the proportion of rented apartments is particularly high at 80 percent.
Guideline rents are increased
The benchmark rent increase in April should be suspended, demanded AK and the rental association. The increase would affect around 750,000 tenants nationwide, 580,000 of them in Vienna. That would tear another hole in the wallet, warned Niedermühlbichler. For an 80 m2 apartment in an old building in Vienna, this would result in additional costs of 185 euros per year, said the tenant association president, in Styria from 250 euros, in Vorarlberg to over 280 euros – the guideline values vary depending on the federal state . This increase would affect everyone who lives in private old buildings (built before 1945) and whose lease was concluded after March 1, 1994.
Already in the past the federal legislature had suspended a benchmark rent increase – for example in 2016 under the SPÖ-ÖVP government Faymann-Mitterlehner under the title “Tenancy Law Inflation Relief Act”, as Niedermühlbichler recalled. In favor of a suspension of this year's increase, SPÖ-Abg. Ruth Becher, chairwoman of the parliamentary building committee, recently tabled a motion for a resolution, referring to the two earlier examples of this kind. The Austrian House and Landowners Association (ÖHGB) immediately criticized this and spoke of a “denial of reality”.
Landlords see “envy debate”
The chairman of the Vienna real estate trustees in the WK, Michael Pisecky, rejected the request for suspension from the AK and tenants' association on Wednesday. For those really hard hit by the corona pandemic, there could be a special solution, but no preferential treatment for all tenants according to the watering can principle. This is a contractually agreed value adjustment in the context of inflation – the term “increase” in rent is wrong, Pisecky said in a broadcast.
With the demand for a suspension, a debate of envy against the private landlord is triggered again, complained the managing director of the Austrian Association of the Real Estate Industry (ÖVI), Anton Holzapfel. Even if the residential real estate sector has so far been little affected by the corona crisis, landlords are confronted with major failures in commercial real estate – and a highly uncertain legal situation as to the rent reductions on business premises rents.
Nevertheless, private landlords have so far been excluded from any state support. It is all the more astonishing if the contracts of private landlords are to be unilaterally intervened here – that should definitely be rejected, according to Holzapfel.
Niedermühlbichler said that suspending the increase in the benchmark – the extent of which the Justice Ministry would announce in March – would not lead to the ruin of the real estate industry. It is one of the few industries that is not feeling the crisis at all. The tenants' association and AK also advocated a reduction in fixed-term rents, a rent reform with clear upper limits and an expansion of the scope of the MRG.
